In ESG, the “E” is for environmental – what does that mean?

Concern for the environment is one of the pillars of ESG; find out what these priorities are in companies

In the acronym ESG (Environmental, Social and Governance), the letter “E” refers to the companies' environmental agenda, that is, the policies, strategies and actions of an organization in favor of the environment.

This is because the word “environmental” means environmental. Therefore, questions such as climate change or the reduction in the use of plastic enter the horizon of companies' indicators, which begin to share this type of responsibility with governments and society. 

Remembering the concept of ESG

The full acronym of ESG stands for Environmental, Social and Governance in Portuguese. This concept therefore encompasses a series of sustainability practices. 

The term first appeared in 2004 in a report by the United Nations (UN), the Global Compact Who Cares Wins, in conjunction with financial institutions.

The report proposed the development of a series of guidelines and recommendations to integrate environmental, social and governance issues in organizations. 

What is Environmental in ESG?

As the “E” in the acronym means “environmental”, this aspect of ESG concerns practices and impacts on the environment caused by the operations of a company and/or organization.

Some examples: the way they use raw materials, the management of water and energy resources, care with solid waste and policies to reduce waste.  carbon footprint

These practices can be measured, evaluated and transformed into best practices. 

This measurement is made by indicators measurement, such as Business Development Index (ISE), that evaluate company initiatives that generate a positive impact on the environment. 

Why is environmental ESG important for companies?

Environmental ESG is important because every company depends on natural resources (which are finite) and affects the environment in some way.  

Therefore, environmental issues are a topic urgent in the world and in Brazil —and are part of Sustainable Development Goals of the 2030 Agenda of the UN (United Nations).  

Sustainable consumption and production, sustainable management of natural resources and containment of global warming These are some environmental ESG practices that are essential for the planet. 

Furthermore, companies that invest in the environmental aspect of ESG gain a good reputation among consumers and investors, among others. stakeholders

5 benefits of environmental ESG

The benefits of implementing an environmental ESG agenda have to do with the future of the planet, in other words, this is a primary issue for maintaining life as a whole. 

Study of the multinational Allianz with 2,650 experts from 89 countries pointed out that, in Brazil, natural catastrophes represent the second biggest risk for companies.  

Therefore, having environmental strategies on the ESG agenda must be a basic requirement for any company that is aligned with sustainable development. 

See below 5 benefits of environmental ESG:

Discover ESG environmental actions on iFood

iFood's ESG actions in the environmental field are aligned with the UN Sustainable Development Goals of Global Compact, of which the company is a signatory. 

Zero pollution plastic in delivery, neutralize carbon emissions and have 50% of non-polluting modes in deliveries These are the company's public commitments until 2025.

To achieve this, the company has well-defined, monitored and measured ESG environmental policies. The result can be seen in the 2021 Impact Report.  

Among the policies, the following stand out: neutral deliveries in carbon emissions, with the acquisition of carbon credits, the use of non-polluting modes, such as bikes, electric motorcycles and the ADA robot, reducing the use of plastic, using sustainable packaging and supporting recycling. 

5 tips on how to develop environmental ESG in companies

To develop environmental ESG in companies, it is essential that managers, CEOs and directors understand the interdependence of environmental, social and governance agendas. 

In the ebook ESG Impact Company – The strategy that has become mandatory among great CEOs, from Exame Academy, 5 steps are presented to develop ESG.  

We have selected these and other tips for implementing environmental strategies in companies. 

  • Develop a strategic plan to find out which are the priority areas and the most important aspects of sustainability for the company. An example is knowing whether raw materials and/or production processes are polluting;
  • Measure the impact of the company's operations, such as the amount of carbon emitted, whether waste is generated, how much natural resources are used, etc. Benchmarking it is a strategy that can be used in this process; 
  • Invest in eco-efficiency programs for the organization to be more environmentally efficient and to minimize the negative effects of operations. Reducing waste, energy and water, using clean energy and purchasing carbon credits are some of these programs; 
  • Develop responsible partnerships with customers and suppliers who have the same concern for the environment; 
  • Elect ambassadors of the paradigm shift among members of senior leadership. Engagement is one of the fundamental steps for implementing ESG.
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